
As the dismal Q2 earnings season winds down, the big positive surprises were mostly stateside despite many investors' preference for European over U.S. equity since midyear. Full-year 2020 estimates for Wall Street stocks have improved to -19% from -22% before the season - while Europe stays gloomy with 2020 estimates unchanged at -33%. Is that widening gap all down to euro/dollar's surge to 2 -year highs? Or are investors just happy to bet now on a relative out-performance next year? Either way, the gains in European stocks in dollar terms in July were all down to currency gains and a continuation of dollar weakness may be needed to justify the switch.
Chart by Ritvik Carvalho and commentary by Mike Dolan.
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